Well-meaning, But Flawed

October 5, 2002

The Broward County Commission on Tuesday should reject the so-called "living wage" ordinance introduced by Commissioner Kristin Jacobs. While Jacobs can't be faulted for her desire to improve economic conditions for lower-paid workers, her approach is flawed and fraught with possibilities of unintended consequences.

The proposed ordinance would require paying employees a "living wage" of at least $9.57 an hour, or the equivalent of 110 percent of the federal poverty level for a family of four, now set at about $18,500 a year.

The wage would apply to all full-time employees of county government, and of private companies holding county contracts of $100,000 or more for food preparation, security, maintenance, clerical work, transportation, landscape maintenance or printing and reproduction. Twenty-eight companies currently hold such contracts.

Companies that don't offer health insurance would have to pay an additional $1.25 an hour. The wage level would be adjusted annually for inflation. Businesses that didn't comply could be fined up to $500 a week for each employee not paid at the minimum level.

Jacobs doesn't hide her intention to amend the ordinance eventually to cover all businesses in Broward, regardless of whether they have contracts with the county.

Government agencies and private businesses should -- and often do -- regularly re-evaluate and upgrade salaries and benefits to attract and retain competent employees and reduce turnover. But private companies shouldn't be compelled by local governments to comply with arbitrary wage levels.

A strong argument can be made that the federal minimum wage, set at $5.15 an hour five years ago, should be increased. That, however, is a responsibility of Congress and should be done only after a thorough debate on the implications to the national economy.

Private businesses must consider bottom-line factors. These include the competitive environment, how wages relate to a company's profitability, employee productivity, and the value an employee adds to a company's products or services.

In addition, wages less than Jacobs' "living wage" are entirely appropriate for certain jobs done by those entering the workforce. No company can justify paying entry-level employees the same wages as workers with a history of successful employment.

If the ordinance passes, some companies may be unable to raise wages to the required level while others may stop hiring full-time or inexperienced workers. Highly qualified companies may simply decide not to do business with Broward County.

Jacobs has identified 419 employees who work directly for the county who she says are being paid "poverty-level" wages. If the commission wants to elevate their salaries to the so-called "living wage" level, it can do so without passing the proposed ordinance.

The cost estimate for the pay adjustment would be $1.6 million for the first year. Commissioners should realize, however, that raising the wage floor would result in significant upward pressure on all wages so that workers with relatively greater skills would continue to be paid more than their lesser skilled colleagues.

While a government entity like the County Commission has the authority to raise taxes to meet an increased payroll, private companies must deal with the competitive nature of the marketplace or risk going out of business.

Commissioners will hold a public hearing at 2 p.m. Tuesday at the county Governmental Center on the "living wage" ordinance. They should respond with a "no" vote on a well-meaning but impractical measure.